The Hindu Business Line : Company secys seek bigger role in capital market

"Company secretaries can help strike a balance between compliance requirements vis-à-vis educating investors and the capital market intermediaries such as stockbrokers, sub-brokers, credit rating agencies, depositories, and merchant bankers," said Mr Pavan Kumar Vijay, outgoing President, ICSI.

"The capital market industry is ever changing and its intermediaries are faced with fast changing developments and growing challenges. The compliance requirements by intermediaries for statutory laws have not only increased, they have become complex, especially in the post-scam period," he told Business Line.

To ensure proper compliance of laws and solve practical problems faced by the industry and investors are some of the challenges before company secretaries today, he added.

As per SEBI requirements, all intermediaries are required to appoint a compliance officer to monitor the compliance rules, regulations, and bye-laws of exchanges, SEBI and relevant authorities.

When the market is bearish, brokers and sub-brokers and other intermediaries have work harder to survive and when it turns bullish, they have to cope with increased operational requirements using existing skeletal staff.

"Compliance gets less priority. While stockbrokers are highly regulated by SEBI and stock exchanges, the investor does not fall into any regulatory realm. The broker faces the conflict of business interest versus compliance. And this is where the professionals can help."

Company secretaries can be given the task of auditing for capital market intermediaries, Mr Vijay said. "The SEBI has also come out with a circular on corporate governance of intermediaries and given a role to company secretaries. Capital market intermediaries require in-depth, innovative and non-traditional services of the professionals. A role which is not only restricted to compliance of Companies Act and related secretarial procedures."

The institute has developed modules on compliance of various laws by capital market intermediaries and is in the process of developing modules on corporate governance norms for them, including background information, guidance notes, checklists, and programme structure.

It has also started a training programme for its members to become experts in the area and informed the SEBI about it.